Are You Looking for a High-Growth Dividend Stock?

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

SB Financial Group, Inc. In Focus

SB Financial Group, Inc. (SBFG) is headquartered in Defiance, and is in the Finance sector. The stock has seen a price change of -6.26% since the start of the year. The company is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 2.96% compared to the Banks - Northeast industry's yield of 2.77% and the S&P 500's yield of 1.59%.

In terms of dividend growth, the company's current annualized dividend of $0.58 is up 3.6% from last year. SB Financial Group, Inc. has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 9.97%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. SB Financial Group's current payout ratio is 32%. This means it paid out 32% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for SBFG for this fiscal year. The Zacks Consensus Estimate for 2025 is $2.03 per share, which represents a year-over-year growth rate of 18.71%.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that SBFG is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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